CapitaMalls Asia: Plague, no more?

CapitaMalls Asia has broken out of its downtrend, closing at $1.92, two bids above resistance at $1.90. Volume increased as price strengthened.

We see a buy signal on the MACD histogram as both the MFI and RSI bounced off 50% support. OBV has turned higher, suggesting increased accumulation. More upside is likely.

The next resistance is a band between $1.95 and $1.98, as defined by the upper Bollinger, the candlestick resistance of end December 2010 and the descending 50dMA. Successfully overcoming this resistance band could see price going higher to where we find the 100d and 200d MAs.  These are now at $2.08 and $2.10 respectively.

Related post:
CapitaMalls Asia: Plagued by downtrend.

Saizen REIT: Golden crosses.

In technical analysis, some look out for the true golden cross which is the 100dMA crossing the 200dMA, going upwards. This is said to be more significant than the 20dMA or the 50dMA crossing the 200dMA as it signifies longer term strength in a counter's price moving upwards.

For Saizen REIT, the 100dMA seems on track to forming a golden cross with the 200dMA although it could be another couple of weeks before it is clearer. That there has been gradual accumulation since mid November 2010 is quite clear from the OBV. The MFI and RSI are above 50% but not overbought. Price could move higher in a nascent uptrend but it could be quite gradual as well.

Related post:
Saizen REIT (3 Jan 11)

S-REIT sector not attractive?

I read that JPMorgan says "valuations are no longer compelling as S-REITs are trading at a forward dividend yield of 6.0%, P/B of 1.1X and 7.5% premium to house NPV estimates."


JPMorgan singled out 2 REITs for comment:

Cuts CapitaCommercial Trust to Underweight vs Neutral on lack of growth, deteriorating portfolio quality and rich valuation. 
 

Cuts CapitaMall Trust to Neutral vs Overweight "as we believe that constant cash calls from the sector would put pressure on the stock."

I am vested in neither one. As with stocks, there will be better counters to be vested in and the ones to avoid. Broader strategy towards S-REITs stays the same for me. Stay vested in S-REITs with higher yields, trading at a discount to NAV and with relatively low gearing.

S-REIT valuations no longer compelling - JPMorgan
Wednesday, 12 January 2011

© 2011 - The Edge Singapore

Hock Lian Seng: Running out of gas?

This counter had been sleeping for some time. Yesterday, it stirred, forming a wickless white candle on the back of higher volume. The bullish candlestick followed through today as price touched a high of 33.5c before closing at 32c, forming a very long upper wick in the process. 32c, thus, remains a formidable resistance with some history backing it.

Although the OBV shows sharp accumulation, both MFI and RSI are in their overbought regions. Price could have moved up too much and too quickly. In case of a pullback, I expect strong support to be found at 30c. Any attempt by the counter to move higher in price could see selling pressure once again as people who bought at 33c might try to break even and get out of what might have been a hasty buy decision.

"If price tests 29c, I would buy more. 29c is also where we find the 138.2% Fibo line. This should lend support in case of retracement." Buying more at 29c almost three months ago has proven to be a good decision.

Related post:
Hock Lian Seng: Buying more?

First REIT: Simply amazing.

If it simply amazing how this REIT's price is pushing higher by the day. How much higher could it go? Why did it touch a high of 77c on 2 occasions and did not go higher?

Well, if we draw a set of Fibo lines, it becomes clear why 77c is resistance. It is where we find the 123.6% Fibo line. However, 23.6% is not a golden ratio and we could expect stronger resistance to be found at 78.5c which is where we would find the 138.2% Fibo line.

Of course, with both the RSI and MFI in overbought territories, we would not be wrong to question if the upward movement could continue. Although the OBV shows no sign of accumulation ending, we could see a pull back to correct the overbought condition. In such an instance, I expect 75c to be resistance turned immediate support.

I still have a fair value of 80c for this REIT based on FA.

Unaudited financial results of First REIT for the fourth quarter and full year ended 31 December 2010 will be announced on Friday, 21 January 2011.
Related post:
First REIT: Retesting high at 75c.

CapitaMalls Asia: Plagued by downtrend.

It is quite obvious that CapitaMalls Asia is still in a downtrend. Macquarie just upgraded it to Outperform from Neutral and raised its target price to $2.24 from $2.19. Will this give this counter the much needed push to break out of its downtrend?

Technically, the counter's price formed a higher low on 4 Jan. This is somewhat encouraging as it has not done so since starting its current decline on 6 Oct 10. Since forming a white candle on 5 Jan, its price has been hovering at $1.88, resisted by the 20dMA.

MFI is now at 50% which could act as a support. RSI is now at its trendline support. Will the supports hold? The MACD, although above the signal line, is still in negative territory. This counter is currently at a crossroad.

Closing above $1.90 would signal a breakout from the downtrend while breaking below $1.88 would signal the collapse of immediate support and price could retest the $1.83 lows. Good luck to fellow shareholders.

Macquarie upgrades CapitaMalls Asia to Outperform. The house reckons “the current weakness is a buying opportunity in a retail powerhouse in Asia.” Notes, CMA invested or committed more than $1.65 billion in four projects in 2H10, ahead of its internal targets; mall developer and owner offers exposure to more than 90 retail malls across five countries in Asia. 
Wednesday, 12 January 2011

© 2011 - The Edge Singapore

Related post:
CapitaMalls Asia: Eyeing $1.83.

AIMS AMP Capital Industrial REIT: 22c support.

Unlike China Hongxing I blogged about just now, AIMS AMP Capital Industrial REIT is something I am heavily vested in. The investment decision was made based on the REIT's sound fundamentals and relatively high yield. I also like what the technicals are telling me now.

Today, I received an email from a reader asking if the high volume is a sign of some big boys slugging it out. I don't know, of course. However, if we check the trade summary, there are about 4.1m units bought up and 4.1m units sold down throughout the day. Of course, almost 5m units changed hands before the market opened at 8.35am. Price? All at 22c. I shan't bother trying to guess what is happening behind the scenes as that would probably just give me a headache and more white hair. Totally unproductive.

However, technically, the charts show that the trendline resistance, which is at 22.5c, remains unbroken. Support remains at 22c. That the support is still holding up despite a much higher volume on a black candle day, with obvious ongoing distribution which is easily seen in a plunging OBV, is very encouraging. Support is strong.

The MFI plunged but is still above its trendline support. The MACD, which broke out of its downtrend some sessions back, is still in positive territory and above the signal line. We want to see the MFI bouncing off its support and the MACD turning up once more. If these happen, resistance at 22.5c would, more likely than not, break in time and we could see the high of 23.5c tested eventually.

Notice:
The unaudited financial results for third quarter ended 31 December 2010 will be released on 25 January 2011, after market close.
Related post:
AIMS AMP Capital Industrial REIT: Firm support.

Back in Singapore and China Hongxing.

I am back from a short holiday. Feeling somewhat exhausted. Probably got much more sun and walking than I am used to in Singapore but I guess it is not a bad thing. If you are wondering where did I go, I went on a cruise with my parents on the Star Virgo. Very enjoyable, as usual, but the internet connection sucks.

The internet connection on the ship is via satellite and it took 5 minutes to load a page! The service was charged at 23c per minute. So, imagine how costly it would be if I were to log on for an hour and, of course, would get to see about 12 pages only! Anyway, I am back at home now and thankful for my ADSL modem.

I am blogging about China Hongxing simply because I received two comments on this counter while I was away. I am not vested.

The wickless white candle formed on 7 Jan was very bullish but there was no follow through and on 10 Jan (Monday), a doji was formed on the back of high volume, signalling indecision. However, the fact that price did not fall below the immediate support provided by the 100dMA at 17.5c  was encouraging. The bears did not win the battle.

In the following two sessions, dragonfly dojis were formed on low volume. Both bulls and bears are being cautious. So, good time to go long? Well, the higher lows on the MACD, MFI and RSI are obvious. There is positive momentum. RSI is overbought but that could stay overbought for a while more especially as we do not see the MFI in overbought territory. Look at the OBV and we do not see any distribution.

In case price breaks immediate support at 17.5c, a longer term and stronger support is at 15.5c. This is where the rising 200dMA is approximating and it is also where the trendline support is found. 15.5c could provide a much nicer entry level for long only traders. Of course, a further strengthening in price could still see 20c tested.

Related post:
China Hongxing: Eyeing 20c.

China Hongxing: Eyeing 20c.

One blog post for the road. :)

I have not had much luck with China Hongxing, having lost some money trading this counter twice in the last few months. I am no longer vested and it seems that things are looking up for this counter. In the last session, China Hongxing broke resistance at 17.5c. This was after closing above the 17c neckline of what is now clearly a double bottom formation on 4 January.

The OBV shows gradual accumulation while the momentum oscillators are all rising. The MACD is rising in positive territory, indicating the return of positive momentum. A higher low on the MFI as it continues to rise suggests firm demand although the RSI has risen into overbought territory. Continuing upmove in price with higher volume could see it test resistance at 20c eventually while 17.5 is immediate support in case of a pull back. Good luck to all who are vested.

First REIT: Retesting high at 75c.

Today, First REIT hit a high of 75.5c before retreating to 75c, the high achieved on 2 and 3 Dec 10, adjusted for the recent rights issue. OBV shows ongoing accumulation while the MFI shows firm demand. The RSI has entered overbought territory but in very sanguine circumstances, it could stay overbought for a while more.

71c was a many times tested resistance which should turn strong support. It is also where we find the 50d and 20d MAs approximating. The 20dMA is also poised to form a golden cross with the 50dMA at this price level. Anyone who bought more units of First REIT, confident of its sound fundamentals during its recent troubled rights issue is now amply rewarded.

Could this REIT's unit price go higher? Your guess is as good as mine but you might remember that I have a fair value estimate of 80c per unit for this REIT. Apparently, OCBC Research thinks it is worth much more with a fair value of 84c per unit. The listed positives are:

1. Good quality assets.

2. Strong and committed sponsor.

3. Steady and sustainable income.

4. Potential upside.

Read the report at http://www.remisiers.org/cms_images/First_REIT-110107-OIR.pdf

Related post:
First REIT: Excess rights not enough.

Raffles Education: Resistance at 200dMA.

Raffles Education extended gains yesterday and closed at 30c, the resistance provided by the 200dMA. A wickless white candle was formed on the back of increased volume. OBV rose steeply, signalling accumulation. MACD rose into positive territory, signalling the return of positive momentum.

MFI and RSI rose higher, crossing into overbought territories. Although signalling heightened demand and positive buying momentum, the indices, being in overbought regions, suggested that further gains could be limited. This panned out today.

A doji was formed today, suggesting indecision. Although the momentum oscillators continue to rise, the OBV has flattened, signalling a stop to accumulation. The explosive rise in price could be at an end. Pull back could find support at 27.5c and 26.5c, as provided by the 100d and 50d MAs, respectively.

Related post:
Raffles Education: Sold at 27.5c resistance.

Raffles Education +5.5%; buybacks give confidence - Kim Eng
Thursday, 06 January 2011

© 2011 - The Edge Singapore

FSL Trust: Sold some at 48c.

Yesterday, I reduced my long position in FSL Trust at 48c, locking in some gains. You might remember that I sold some on 30 Dec at 47c. Then, I mentioned that "In a benign situation, I expect gap resistance at 46c to become support in the near term. This is further strengthened by the uptrend support line. Technically, the worst seems to be over for FSL Trust and a retest of resistance at 48.5c looks likely in time." 48c is just one bid away from 48.5c and selling some at 48c is a hedge in case price weakens.

A doji was formed yesterday, suggesting indecision, while the uptrending MFI broke its support when it emerged from the overbought territory a day earlier. Encouraging though some technicals might be with the MACD continuing to rise and the OBV showing no signs of distribution, the RSI was way overbought.

My long position in FSL is for a trade and the entry was not based on fundamentals, which are lacking. So, reducing my long position, locking in gains at resistance and at signs of weakening demand, at least partially, is prudent although it could limit gains in case of further price appreciation.

Today, 48c remains the resistance as a gravestone doji was formed. The stalemate between bulls and bears is obvious but it seems as if the bulls are tiring. Further upside seems difficult and could be limited to a retest of the high of 48.5c touched on 21 Oct 10. A pull back would see immediate support at 46c which is also where the 20dMA is rising to form a golden cross with the declining 200dMA.

Related post:
FSL Trust: Sold some at 47c.